Suez War

The Suez Crisis, also known as the Second Arab–Israeli War, the Tripartite Aggression in the Arab world and the Sinai War in Israel, was a British–French–Israeli invasion of Egypt in 1956. Israel invaded on 29 October, having done so with the primary objective of re-opening the Straits of Tiran and the Gulf of Aqaba as the recent tightening of the eight-year-long Egyptian blockade further prevented Israeli passage. After issuing a joint ultimatum for a ceasefire, the United Kingdom and France joined the Israelis on 5 November, seeking to depose Egyptian president Gamal Abdel Nasser and regain control of the Suez Canal, which Nasser had earlier nationalised by transferring administrative control from the foreign-owned Suez Canal Company to Egypt's new government-owned Suez Canal Authority. Shortly after the invasion began, the three countries came under heavy political pressure from both the United States and the Soviet Union, as well as from the United Nations, eventually prompting their withdrawal from Egypt. The Crisis demonstrated that the United Kingdom and France could no longer pursue their independent foreign policy without consent from the United States. Israel's four-month-long occupation of the Egyptian-occupied Gaza Strip and Egypt's Sinai Peninsula enabled it to attain freedom of navigation through the Straits of Tiran, but the Suez Canal was closed from October 1956 to March 1957.

U.S. president Dwight D. Eisenhower had issued a strong warning to the British if they were to invade Egypt; he threatened serious damage to the British financial system by selling the American government's bonds of pound sterling. Before their defeat, Egyptian troops blocked all ship traffic by sinking 40 ships in the canal. It later became clear that Israel, the UK, and France had conspired to invade Egypt. These three achieved a number of their military objectives, although the canal was useless.

The crisis strengthened Nasser's standing and led to international humiliation for the British—with historians arguing that it signified the end of its role as a world superpower—as well as the French amid the Cold War (which established the U.S. and the USSR as the world's superpowers). As a result of the conflict, the UN established an emergency force to police and patrol the Egypt–Israel border, while British prime minister Anthony Eden resigned from his position. For his diplomatic efforts in resolving the conflict through UN initiatives, Canadian external affairs minister Lester B. Pearson received a Nobel Peace Prize. Analysts have argued that the crisis may have emboldened the USSR, prompting the Soviet invasion of Hungary.

Background

Construction of the Suez Canal

The Suez Canal was opened in 1869, after ten years of work financed by the French and Egyptian governments. The canal was operated by the Suez Company, an Egyptian-chartered company; the area surrounding the canal remained sovereign Egyptian territory and the only land-bridge between Africa and Asia.

The canal instantly became strategically important, as it provided the shortest ocean link between the Mediterranean Sea and the Indian Ocean. The canal eased commerce for trading nations and particularly helped European colonial powers to gain and govern their colonies.

In 1875, as a result of debt and financial crisis, Egypt was forced to sell its shares in the operating company to the British government. They were willing buyers and obtained a 44% share in the company for £4 million (equivalent to £ million in ). This maintained the majority shareholdings of the mostly-French private investors. With the 1882 invasion and occupation of Egypt, the UK took ''de facto'' control of the country as well as the canal, its finances and operations.

Convention of Constantinople

The 1888 Convention of Constantinople declared the canal a neutral zone under British protection. In ratifying it, the Ottoman Empire agreed to permit international shipping to pass freely through the canal, in time of war and peace. The Convention came into force in 1904, the same year as the ''Entente Cordiale'' between Britain and France.

Despite this convention, the strategic importance of the canal and its control were proven during the Russo-Japanese War of 1904–05, after Japan and Britain entered into a separate bilateral agreement. Following the Japanese attack on the Russian Pacific Fleet at Port Arthur, the Russians sent reinforcements from their fleet in the Baltic Sea. The British denied the Russian Baltic Fleet use of the canal after the Dogger Bank incident and forced it to steam around the Cape of Good Hope in Africa, giving the Imperial Japanese Armed Forces time to consolidate their position.

The importance of the canal as a strategic intersection was again apparent during the First World War, when Britain and France closed the canal to non- Allied shipping. The attempt by the German-led Ottoman Fourth Army to storm the canal in 1915 led the British to commit 100,000 troops to the defence of Egypt for the rest of the war.

Oil shipments

The canal continued to be strategically important after the Second World War for oil shipment. Petroleum historian Daniel Yergin wrote: "In 1948, the canal abruptly lost its traditional rationale. ... ritishcontrol over the canal could no longer be preserved on grounds that it was critical to the defence either of India or of an empire that was being liquidated. And yet, at exactly the same moment, the canal was gaining a new role—as the highway not of empire, but of oil. ... By 1955, petroleum accounted for half of the canal's traffic, and, in turn, two thirds of Europe's oil passed through it".

Western Europe then imported two million barrels per day from the Middle East, 1,200,000 by tanker through the canal, and another 800,000 via pipeline from the Persian Gulf (Trans-Arabian Pipeline) and Kirkuk ( Kirkuk-Baniyas pipeline) to the Mediterranean, where tankers received it. The US imported another 300,000 barrels daily from the Middle East. Though pipelines linked the oil fields of the Kingdom of Iraq and the Persian Gulf states to the Mediterranean, these routes were prone to suffer from instability, which led British leaders to prefer to use the sea route through the canal. The rise of super-tankers for shipping Middle East oil to Europe, which were too big to use the canal, meant British policymakers greatly overestimated the importance of the canal. By 2000, only 8% of the imported oil in Britain arrived via the Suez Canal with the rest coming via the Cape route.

In August 1956 the Royal Institute of International Affairs published a report "Britain and the Suez Canal" revealing government perception of the Suez area. It reiterated the strategic necessity of the canal to the UK, including the need to meet military obligations under the Manila Pact in the Far East and the Baghdad Pact in Iraq, Iran, or Pakistan. The report noted the canal had been used in wartime to transport materiel and personnel from and to the UK's close allies in Australia and New Zealand, and might be vital for such purposes in future. The report cites the amount of material and oil that passes through the canal to the UK, and the economic consequences of the canal being put out of commission, concluding:

After World War II

In the aftermath of the Second World War, Britain's military strength was spread throughout the region, including the vast military complex at Suez with a garrison of 80,000, making it one of the largest military installations in the world. The Suez base was an important part of Britain's strategic position in the Middle East; however, it became a source of growing tension in Anglo-Egyptian relations.

Egypt's domestic politics were experiencing a radical change, prompted by economic instability, inflation, and unemployment. Unrest began to manifest in the growth of radical political groups, such as the Muslim Brotherhood in Egypt, and an increasingly hostile attitude towards Britain and its presence. Added to this anti-British fervour was the role Britain had played in the creation of Israel.

In October 1951, the Egyptian government unilaterally abrogated the Anglo-Egyptian Treaty of 1936, the terms of which granted Britain a lease on the Suez base for 20 more years. Britain refused to withdraw from Suez, relying upon its treaty rights, as well as the presence of the Suez garrison. The price of such action was an escalation in violent hostility towards Britain and its troops in Egypt, which the Egyptian authorities did little to curb.

In January 1952, British forces attempted to disarm a troublesome auxiliary police force barracks in Ismailia, resulting in the deaths of 41 Egyptians. This led to anti-Western riots in Cairo resulting in damage to property and the deaths of foreigners, including 11 British citizens. This proved to be a catalyst for the removal of the Egyptian monarchy. On 23 July 1952 a military coup by the Egyptian nationalist ' Free Officers Movement'—led by Muhammad Neguib and future Egyptian President Gamal Abdul Nasser—overthrew King Farouk and established an Egyptian republic.

After the 1952 Egyptian Revolution

In the 1950s, the Middle East was dominated by four interlinked conflicts:
* the Cold War, the geopolitical battle for influence between the United States and Soviet Union;
* the Arab Cold War, the race between different Arab states for the leadership of the Arab world;
* the anti-colonial struggle of Arab nationalists against the two remaining imperial powers, Britain and France, in particular the Algerian War;
* and the Arab–Israeli conflict, the political and military conflict between Arab countries and Israel.

Egypt and Britain

Britain's desire to mend Anglo-Egyptian relations in the wake of the coup saw the country strive for rapprochement throughout 1953-54. Part of this process was the agreement, in 1953, to terminate British rule in Sudan by 1956, in return for Cairo's abandoning its claim to suzerainty over the Nile Valley. In October 1954, Britain and Egypt concluded the Anglo-Egyptian Agreement on the phased evacuation of British Armed Forces troops from the Suez base, the terms of which agreed to withdrawal of all troops within 20 months, maintenance of the base to be continued, and for Britain to hold the right to return for seven years. The Suez Company was not due to revert to the Egyptian government until 1968 under the terms of the treaty.

Britain's close relationship with the two Hashemite kingdoms of Iraq and Jordan were of particular concern to Nasser. In particular, Iraq's increasingly amicable relations with Britain were a threat to Nasser's desire to see Egypt as head of the Arab world. The creation of the Baghdad Pact in 1955 seemed to confirm Nasser's fears Britain was attempting to draw the Eastern Arab World into a bloc centred upon Iraq, and sympathetic to Britain. Nasser's response was a series of challenges to British influence in the region that would culminate in the Suez Crisis.

Egypt and the Arab League

In regard to the Arab leadership, particularly venomous was the feud between Nasser and the Prime Minister of Iraq, Nuri al-Said, for Arab leadership, with the Cairo-based Voice of the Arabs radio station regularly calling for the overthrow of the government in Baghdad. The most important factors that drove Egyptian foreign policy was a determination to see the entire Middle East as Egypt's rightful sphere of influence, and a tendency on the part of Nasser to fortify his pan-Arabist and nationalist credibility by seeking to oppose all Western security initiatives in the Near East.

Despite the establishment of such an agreement with the British, Nasser's position remained tenuous. The loss of Egypt's claim to Sudan, coupled with the continued presence of Britain at Suez for a further two years, led to domestic unrest including an assassination attempt against him in October 1954. The tenuous nature of Nasser's rule caused him to believe that neither his regime nor Egypt's independence would be safe until Egypt had established itself as head of the Arab world. This would manifest in the challenging of British Middle Eastern interests throughout 1955.

Egypt and the Cold War

The US, while attempting to erect an alliance in the form of a Middle East Defense Organization to keep the Soviet Union out of the Near East, tried to woo Nasser into this alliance. The central problem for American policy was that this region was perceived as strategically important due to its oil, but the United States, weighed down by defence commitments in Europe and the Far East, lacked sufficient troops to resist a Soviet invasion of the Middle East. In 1952, General Omar Bradley of the Joint Chiefs of Staff declared at a planning session about what to do in the event of a Soviet invasion of the Near East: "Where will the staff come from? It will take a lot of stuff to do a job there".

As a consequence, American diplomats favoured the creation of a NATO-type organisation in the Near East to provide the necessary military power to deter the Soviets from invading. The Eisenhower administration, even more than the Truman administration, saw the Near East as a huge gap into which Soviet influence could be projected, and accordingly required an American-supported security system. American diplomat Raymond Hare later recalled:

The projected Middle East Defense Organization (MEDO) was to be centered on Egypt. A United States National Security Council directive of March 1953 called Egypt the "key" to the Near East and advised that Washington "should develop Egypt as a point of strength".

A dilemma for American policy was that the two strongest powers in the Near East, Britain and France, were the nations whose influence many local nationalists most resented. From 1953 onwards, American diplomacy had attempted unsuccessfully to persuade the powers involved in the Near East, local and imperial, to set aside their differences and unite against the Soviets. The Americans took the view that, just as fear of the Soviet Union had helped to end the historic Franco-German enmity, so could anti-Communism end the Arab–Israeli dispute. It was a source of constant puzzlement to American officials in the 1950s, that Arab states and Israelis had more interest in fighting each other, than uniting against the Soviet Union. After his visit to the Middle East in May 1953 to drum up support for MEDO, the Secretary of State, John Foster Dulles found to his astonishment that the Arab states were "more fearful of Zionism than of the Communists".

The policy of the United States was colored by uncertainty as to whom to befriend. American policy was torn between a desire to maintain good relations with NATO allies such as Britain and France who were major colonial powers, and to align Third World nationalists with the Free World camp. Though it would be false to describe the coup deposing King Farouk in July 1952 as a Central Intelligence Agency (CIA) coup, Nasser and his Society of Free Officers were in contact with CIA operatives beforehand Nasser maintained links with potential allies, from the Egyptian Communist Party to the Muslim Brotherhood on the right.

Nasser's friendship with CIA officers in Cairo led Washington to overestimate its influence in Egypt. That Nasser was close to CIA officers led them to view Nasser as a CIA "asset". In turn, the British who were aware of Nasser's CIA ties resented this relationship, which they viewed as an American attempt to push them out of Egypt. The reason for Nasser's courting of the CIA before the coup was his hope the Americans would act as a restraining influence on the British, should Britain decide on intervention to put an end to the revolution (until Egypt renounced it in 1951, the 1936 Anglo-Egyptian treaty allowed Britain the right of intervention against foreign and domestic threats). In turn, many American officials, such as Ambassador Jefferson Caffery, saw the British military presence in Egypt as anachronistic, and viewed the Revolutionary Command Council (as Nasser called his government) in a favourable light.

Caffery was consistently positive about Nasser in his reports to Washington, right up until his departure from Cairo in 1955. The regime of King Farouk was viewed in Washington as weak, corrupt, unstable, and anti-American, so the Free Officers' July coup was welcomed. Nasser's contacts with the CIA were not necessary to prevent British intervention against the coup as Anglo-Egyptian relations had deteriorated so badly in 1951–52 that the British viewed any Egyptian government not headed by King Farouk as an improvement. In May 1953, during a meeting with Secretary Dulles, who asked Egypt to join an anti-Soviet alliance, Nasser responded by saying that the Soviet Union has

Dulles informed Nasser of his belief that the Soviet Union was seeking world conquest, that the principal danger to the Near East came from the Kremlin, and urged Nasser to set aside his differences with Britain to focus on countering the Soviet Union. In this spirit, Dulles suggested that Nasser negotiate a deal that would see Egypt assume sovereignty over the canal zone base, but then allow the British to have "technical control" in the same way Ford auto company provided parts and training to its Egyptian dealers.

Nasser did not share Dulles's fear of the Soviet Union and insisted vehemently he wanted to see the end of British influence in the Middle East. The CIA offered Nasser a $3 million bribe if he would join the proposed Middle East Defense Organization; Nasser took the money, but refused to join. Nasser made it clear to the Americans he wanted an Egyptian-dominated Arab League to be the principal defence organisation in the Near East, which might be informally associated with the United States.

After he returned to Washington, Dulles advised Eisenhower that the Arab states believed "the United States will back the new state of Israel in aggressive expansion. Our basic political problem ... is to improve the Moslem states' attitudes towards Western democracies because our prestige in that area had been in constant decline ever since the war". The immediate consequence was a new policy of "even-handedness" where the United States very publicly sided with the Arab states in disputes with Israel in 1953–54. Moreover, Dulles did not share any sentimental regard for the Anglo-American "special relationship", which led the Americans to lean towards the Egyptian side in the Anglo-Egyptian disputes. During the difficult negotiations over the British evacuation of the Suez Canal base in 1954–55, the Americans supported Egypt, though trying hard to limit the extent of the damage this might cause to Anglo-American relations.

In the same report of May 1953 to President Dwight D. Eisenhower calling for "even-handedness", Dulles stated that the Egyptians were not interested in joining the proposed MEDO; that the Arabs were more interested in their disputes with the British, French, Israelis and each other than in standing against the Soviets; and that the "Northern Tier" states of Turkey, Iran and Pakistan were more useful as allies than Egypt. Accordingly, the best American policy towards Egypt was to work towards Arab–Israeli peace and the settlement of the Anglo-Egyptian dispute over the British Suez Canal base, as the best way of securing Egypt's ultimate adhesion to an American sponsored alliance centered on the "Northern Tier" states.

The "Northern Tier" alliance was achieved in early 1955 with the creation of the Baghdad Pact comprising Pakistan, Iran, Turkey, Iraq and the UK. The presence of the last two states was due to the British desire to continue to maintain influence in the Middle East, and Nuri Said's wish to associate his country with the West, as the best way of counterbalancing the aggressive Egyptian claims to regional predominance. The conclusion of the Baghdad Pact occurred almost simultaneously with a dramatic Israeli reprisal operation on the Gaza Strip on 28 February 1955 in retaliation for Palestinian ''fedayeen'' raids into Israel, during which the Israeli Unit 101 commanded by Ariel Sharon did damage to Egyptian Army forces.

The close occurrence of the two events was mistakenly interpreted by Nasser as part of coordinated Western effort to push him into joining the Baghdad Pact. The signing of the Baghdad Pact and the Gaza raid marked the beginning of the end of Nasser's good relations with the Americans. In particular, Nasser saw Iraq's participation in the Baghdad Pact as a Western attempt to promote his archenemy Nuri al-Said as an alternative leader of the Arab world.

= Nasser and the Soviet Union

=
Instead of siding with either superpower, Nasser took the role of the spoiler, and tried to play them off, to have them compete in attempts to buy his friendship.

Under the new leadership of Nikita Khrushchev, the Soviet Union was making a major effort to win influence in the so-called Third World. As part of the diplomatic offensive, Khrushchev had abandoned Moscow's traditional line of treating all non-communists as enemies and adopted a tactic of befriending so-called "non-aligned" nations, which often were led by leaders who were non-Communists, but were hostile towards the West. Khrushchev had realised that by treating non-communists as being the same thing as being anti-communist, Moscow had needlessly alienated many potential friends over the years in the Third World. Under the banner of anti-imperialism, Khrushchev made it clear that the Soviet Union would provide arms to any left-wing government in the Third World as a way of undercutting Western influence.

Chinese Premier Zhou Enlai met Nasser at the 1955 Bandung Conference and was impressed by him. Zhou recommended that Khrushchev treat Nasser as a potential ally. Zhou described Nasser to Khrushchev as a young nationalist who, though no Communist, could if used correctly do much damage to Western interests in the Middle East. Marshal Josip Broz Tito of Yugoslavia, who also came to know Nasser at the Bandung Conference told Khrushchev in a 1955 meeting that "Nasser was a young man without much political experience, but if we give him the benefit of the doubt, we might be able to exert a beneficial influence on him, both for the sake of the Communist movement, and ... the Egyptian people". Traditionally, most of the equipment in the Egyptian military had come from Britain, but Nasser's desire to break British influence in Egypt meant that he was desperate to find a new source of weapons to replace Britain. Nasser had first broached the subject of buying weapons from the Soviet Union in 1954.

= Nasser and the United States

=
Most of all, Nasser wanted the United States to supply arms on a generous scale to Egypt. Nasser refused to promise that any U.S. arms he might buy would not be used against Israel, and rejected out of hand the American demand for a Military Assistance Advisory Group to be sent to Egypt as part of the arms sales.

Nasser's first choice for buying weapons was the United States. However his frequent anti-Zionist speeches and sponsorship of the Palestinian ''fedayeen'', who made frequent raids into Israel, rendered it difficult for the Eisenhower administration to get the approval of Congress necessary to sell weapons to Egypt. American public opinion was deeply hostile towards selling arms to Egypt that might be used against Israel. Moreover, Eisenhower feared doing so could trigger a Middle Eastern arms race. Eisenhower very much valued the Tripartite Declaration as a way of keeping peace in the Near East. In 1950, in order to limit the extent that the Arabs and the Israelis could engage in an arms race, the three nations which dominated the arms trade in the non-Communist world, namely the United States, the United Kingdom and France, had signed the Tripartite Declaration, where they had committed themselves to limiting how much arms they could sell in the Near East, and also to ensuring that any arms sales to one side was matched by arms sales of equal quantity and quality to the other. Eisenhower viewed the Tripartite Declaration, which sharply restricted how many arms Egypt could buy in the West, as one of the key elements in keeping the peace between Israel and the Arabs, and believed that setting off an arms race would inevitably lead to a new war.

The Egyptians made continuous attempts to purchase heavy arms from Czechoslovakia years before the 1955 deal.

Nasser had let it be known, in 1954–55, that he was considering buying weapons from the Soviet Union, and thus coming under Soviet influence, as a way of pressuring the Americans into selling him the arms he desired. Khrushchev, who very much wanted to win the Soviet Union influence in the Middle East, was more than ready to arm Egypt if the Americans proved unwilling. During secret talks with the Soviets in 1955, Nasser's demands for weapons were more than amply satisfied as the Soviet Union had not signed the Tripartite Declaration. The news in September 1955 of the Egyptian purchase of a huge quantity of Soviet arms via Czechoslovakia was greeted with shock and rage in the West, where this was seen as a major increase in Soviet influence in the Near East. In Britain, the increase of Soviet influence in the Near East was seen as an ominous development that threatened to put an end to British influence in the oil-rich region.

France and Egypt's support for Algerian rebels

Over the same period, the French Premier Guy Mollet was facing an increasingly serious rebellion in Algeria, where the Algerian National Liberation Front (FLN) rebels were being verbally supported by Egypt via transmissions of the Voice of the Arabs radio, financially supported with Suez Canal revenue and clandestinely owned Egyptian ships were shipping arms to the FLN. Mollet came to perceive Nasser as a major threat. During a visit to London in March 1956, Mollet told Eden his country was faced with an Islamic threat to the very soul of France supported by the Soviet Union. Mollet stated: "All this is in the works of Nasser, just as Hitler's policy was written down in ''Mein Kampf''. Nasser has the ambition to recreate the conquests of Islam. But his present position is largely due to the policy of the West in building up and flattering him".

In a May 1956 gathering of French veterans, Louis Mangin spoke in place of the unavailable Minister of Defence and gave a violently anti-Nasser speech, which compared the Egyptian leader to Hitler. He accused Nasser of plotting to rule the entire Middle East and of seeking to annex Algeria, whose "people live in community with France". Mangin urged France to stand up to Nasser, and being a strong friend of Israel, urged an alliance with that nation against Egypt.

Fluctuation of the Egyptian–Israeli relationship

Prior to 1955, Nasser had pursued efforts to reach peace with Israel and had worked to prevent cross-border Palestinian attacks. In February 1955, Unit 101, an Israeli unit under Ariel Sharon, conducted a raid on the Egyptian Army headquarters in Gaza in retaliation for a ''Palestinian fedayeen'' attack that killed an Israeli civilian. As a result of the incident, Nasser began allowing raids into Israel by the Palestinian militants. Egypt established fedayeen bases not just in Gaza but also in Jordan and Lebanon, from which incursions could be launched with a greater amount of plausible deniability on the part of Nasser's Egypt. The raids triggered a series of Israeli reprisal operations, which ultimately contributed to the Suez Crisis.

Emergence of a French–Israeli alliance

Starting in 1949 owing to shared nuclear research, France and Israel started to move towards an alliance. Following the outbreak of the Algerian War in late 1954, France began to ship more and more arms to Israel. In November 1954, the Director-General of Israel's Ministry of Defense Shimon Peres visited Paris, where he was received by the French Defense Minister Marie-Pierre Kœnig, who told him that France would sell Israel any weapons it wanted to buy. By early 1955, France was shipping large amounts of weapons to Israel. In April 1956, following another visit to Paris by Peres, France agreed to totally disregard the Tripartite Declaration, and supply even more weapons to Israel. During the same visit, Peres informed the French that Israel had decided upon war with Egypt in 1956. Peres claimed that Nasser was a genocidal maniac intent upon not only destroying Israel, but also exterminating its people, and as such, Israel wanted a war before Egypt received even more Soviet weapons, and there was still a possibility of victory for the Jewish state.

Frustration of British influence in the Middle East

Throughout 1955 and 1956, Nasser pursued a number of policies that would frustrate British aims throughout the Middle East, and result in increasing hostility between Britain and Egypt. Nasser saw Iraq's inclusion in the Baghdad Pact as indicating that the United States and Britain had sided with his much hated archenemy Nuri al-Said's efforts to be the leader of the Arab world, and much of the motivation for Nasser's turn to an active anti-Western policy starting in 1955 was due to his displeasure with the Baghdad Pact. For Nasser, attendance at such events as the Bandung conference in April 1955 served as both the means of striking a posture as a global leader, and of playing hard to get in his talks with the Americans, especially his demand that the United States sell him vast quantities of arms.

Nasser "played on the widespread suspicion that any Western defence pact was merely veiled colonialism and that Arab disunity and weakness—especially in the struggle with Israel—was a consequence of British machinations." He also began to align Egypt with the kingdom of Saudi Arabia—whose rulers were hereditary enemies of the Hashemites—in an effort to frustrate British efforts to draw Syria, Jordan and Lebanon into the orbit of the Baghdad Pact. Nasser struck a further blow against Britain by negotiating an arms deal with communist Czechoslovakia in September 1955.

Egyptian policies in 1956

Nasser and Jordan

Nasser frustrated British attempts to draw Jordan into the pact by sponsoring demonstrations in Amman, leading King Hussein of Jordan in the Arabization of the Jordanian Army command to dismiss the British commander of the Arab Legion, John Bagot Glubb (known to the Arabs as Glubb Pasha) in March 1956. After one round of bloody rioting in December 1955 and another in March 1956 against Jordan joining the Baghdad Pact, both instigated by the Cairo-based Voice of the Arabs radio station, Hussein believed his throne was in danger.

Nasser and Britain

British Prime Minister Anthony Eden was especially upset at the sacking of Glubb Pasha, and as one British politician recalled:

After the sacking of Glubb Pasha, which he saw as a grievous blow to British influence, Eden became consumed with an obsessional hatred for Nasser, and from March 1956 onwards, was in private committed to the overthrow of Nasser. The American historian Donald Neff wrote that Eden's often hysterical and overwrought views towards Nasser almost certainly reflected the influence of the amphetamines to which Eden had become addicted following a botched operation in 1953 together with the related effects of sustained sleep deprivation (Eden slept on average about 5 hours per night in early 1956).

Britain was eager to tame Nasser and looked towards the United States for support. However, Eisenhower strongly opposed British-French military action. The United States, opposed to foreign intervention in Egypt, initially blocked British access to IMF help, pressuring the United Kingdom to withdraw its troops. When the British government, left with no choice, acceded to US demands, the IMF extended its largest-ever loan to a member (an immediate $561 million drawing to replenish the UK's reserves, with an additional $739 million "stand-by" loan to be provided on an as-needed basis). Smaller loans were extended to France, Israel, and Egypt. America's closest Arab ally, Saudi Arabia, was just as fundamentally opposed to the Hashemite-dominated Baghdad Pact as Egypt, and the U.S. was keen to increase its own influence in the region. The failure of the Baghdad Pact aided such a goal by reducing Britain's dominance over the region. "Great Britain would have preferred to overthrow Nasser; America, however uncomfortable with the ' Czech arms deal', thought it wiser to propitiate him."

American financing for Egypt's Aswan Dam

On 16 May 1956, Nasser officially recognized the People's Republic of China, which angered the U.S. and Secretary Dulles, a sponsor of the Republic of China. This move, coupled with the impression that the project was beyond Egypt's economic capabilities, caused Eisenhower to withdraw all American financial aid for the Aswan Dam project on 19 July.

The Eisenhower administration believed that if Nasser were able to secure Soviet economic support for the high dam, that would be beyond the capacity of the Soviet Union to support, and in turn would strain Soviet–Egyptian relations. Eisenhower wrote in March 1956 that "If Egypt finds herself thus isolated from the rest of the Arab world, and with no ally in sight except Soviet Russia, she would very quickly get sick of the prospect and would join us in the search for a just and decent peace in the region". Dulles told his brother, CIA director Allen Dulles, "If they he Sovietsdo make this offer we can make a lot of use of it in propaganda within the satellite bloc. You don't get bread because you are being squeezed to build a dam".

Finally, the Eisenhower administration had become very annoyed at Nasser's efforts to play the United States off against the Soviet Union, and refused to finance the Aswan high dam. As early as September 1955, when Nasser announced the purchase of the Soviet military equipment via Czechoslovakia, Dulles had written that competing for Nasser's favor was probably going to be "an expensive process", one that Dulles wanted to avoid as much as possible.

Nasser–US negotiations

In January 1956, to end the incipient arms race in the Middle East (set off by the Soviet Union selling Egypt arms on a scale unlimited by the Tripartite Declaration and with France doing likewise with Israel), which he saw as opening the Near East to Soviet influence, Eisenhower launched a major effort to make peace between Egypt and Israel. Eisenhower sent out his close friend Robert B. Anderson to serve as a secret envoy who would permanently end the Arab–Israeli dispute. During his meetings with Nasser, Anderson offered large quantities of American aid in exchange for a peace treaty with Israel. Nasser demanded Palestinian refugees be given the opportunity to choose between repatriation or resettlement in Arab countries, wanted to annex the southern half of Israel and rejected direct talks with Israel. Given Nasser's territorial and refugee-related demands, the Israeli Prime Minister David Ben-Gurion suspected that Nasser was not interested in a settlement, insteading demanding face-to-face negotiations with Nasser, starting with lower-level negotiations, and weapons from the US. Nasser was unwilling to accept direct negotiations, citing possible assassinations such as the assassination of King Abduallah.

A second round of secret diplomacy by Anderson in February 1956 was equally unsuccessful. Nasser sometimes suggested during his talks with Anderson that he was interested in peace with Israel if only the Americans would supply him with unlimited quantities of military and economic aid. In case of Israeli acceptance to the Palestinian right of return and to Egypt annexing the southern half of Israel, Egypt would not accept a peace settlement. The United States or the United Nations would have to present the Israeli acceptance to all Arabs as a basis for peace settlements. It is not clear if Nasser was sincerely interested in peace, or just merely saying what the Americans wanted to hear in the hope of obtaining American funding for the Aswan high dam and American weapons. The truth will likely never be known as Nasser was an intensely secretive man, who managed to hide his true opinions on most issues from both contemporaries and historians. However, the British historian P. J. Vatikitos noted that Nasser's determination to promote Egypt as the world's foremost anti-Zionist state as a way of reinforcing his claim to Arab leadership meant that peace was unlikely.

Hasan Afif El-Hasan says that in 1955–1956 the Americans proposed to Nasser that he solve the Arab–Israeli conflict peacefully in exchange for American finance of the High Dam on the Nile river, but Nasser rejected the offer because it would mean siding with the West (as opposed to remaining neutral) in the Cold War. Since the alternative to a peace agreement was a war with unpredictable consequences, Nasser's refusal to accept the proposal was irrational, according to el-Hasan.

Nationalisation of the Suez Canal

Nasser's response was the nationalisation of the Suez Canal. On 26 July 1956, in a speech in Alexandria, Nasser gave a riposte to Dulles. During his speech he deliberately pronounced the name of Ferdinand de Lesseps, the builder of the canal, a code-word for Egyptian forces to seize control of the canal and implement its nationalisation. He announced that the Nationalization Law had been published, that all assets of the Suez Canal Company had been frozen, and that stockholders would be paid the price of their shares according to the day's closing price on the Paris Stock Exchange. That same day, Egypt closed the canal to Israeli shipping. Egypt also closed the Straits of Tiran to Israeli shipping, and blockaded the Gulf of Aqaba, in contravention of the Constantinople Convention of 1888. Many argued that this was also a violation of the 1949 Armistice Agreements

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